Mobilisation security
Advance payment guarantees
Protection for advance funds paid to a contractor or supplier before the corresponding work, equipment or materials are delivered.
Submit this type of riskAn advance payment guarantee supports repayment of an advance where the applicant does not earn it through delivery of the underlying contract. Advances are often used to fund mobilisation, long-lead materials, plant or manufacturing, creating a distinct cash and performance exposure for the beneficiary.
Underwriting therefore goes beyond the applicant's balance sheet. Titanium examines how the advance will be controlled, when it amortises, whether it is ring-fenced, what evidence reduces the guaranteed amount and how the advance interacts with termination, set-off and other contract rights.
Typical uses
Where it can apply.
- Project mobilisation payments
- Procurement of long-lead materials
- Equipment manufacture and supply contracts
- International engineering and construction contracts
Underwriting focus
What drives the decision.
- Purpose, payment route and control of the advance
- Clear amortisation linked to certified work or delivery
- Applicant liquidity and ability to perform without reliance on future advances
- Underlying contract, guarantee wording and cross-default exposure
Initial submission
Information that moves the review forward.
A complete pack reduces assumptions and allows legal structure, wording and credit to be considered together.
- 01
Contract and advance payment clause
- 02
Proposed guarantee wording and reduction schedule
- 03
Cash-flow forecast showing receipt and use of the advance
- 04
Evidence of ring-fencing or payment controls where applicable
- 05
Financial statements and current management accounts
- 06
Project plan, procurement schedule and supplier information
Important considerations
Structure remains case specific.
- A guarantee should reduce as the advance is earned.
- Open-ended wording or weak reduction evidence materially increases risk.
- Security expectations reflect both credit quality and advance controls.
Common questions
Clear answers before submission.
Why is an amortisation schedule important?
It ties the live guarantee exposure to the amount of advance that remains unearned. Without a clear mechanism, the guarantee can remain at its original amount after the economic exposure has reduced.
Can an APG run alongside a performance bond?
Yes. The two instruments cover different obligations, but their combined exposure and any overlapping demand triggers are assessed together.
Discuss an opportunity
Discuss a advance payment guarantees opportunity.
Our review starts with the underlying obligation, the applicant and the legally compliant route to issuance.
Submit a risk